Monday, June 29, 2009

Bondage in the Bond Age: A California View

In the midst of the Bush-Obama balance sheet bailout, one group stands out in its importance -- bondholders. I know -- a couple of times some bondholders have had to take a haircut to protect other investors.

Here in California, with our $24 billion deficit, it seems like nothing -- absolutely nothing -- and threaten bondholders. Yes, some bondholders are pension funds or charitable organizations. A minority of Republicans along with a movie star governor have adamantly refused to raise taxes, especially those taxes that might affect the class of people who are bondholders.

Education and healthcare are being slashed beyond recognition. My God, even prisons might be cut a bit. The state is also raiding the treasuries of cities and counties for funds. Their response will be the same as the state's: cut back on anything that might help the poor and if necessary extend the cuts to the middle class. All this so that California can payback its bondholders. No haircut here. They must be paid back in full.

And the children, deprived of adequate education and health care, of course, they must make a modest sacrifice to protect the interests of bondholders.